Mastercard Chargeback and Ratio (Table)

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The Terms


Chargeback

A chargeback is a forced refund of purchase. Typically, a dissatisfied consumer tells their bank to reverse the charge. The bank does this automatically or after an investigation of potential fraud. Their card networks (Visa and Mastercard) place a limit on the acceptable ratio of chargebacks per merchant.

Mastercard Chargeback Limits

For Mastercard as of May 2020 the limit is 1.5% of chargebacks as a ratio of sales in the current month after a threshold of 100 chargebacks have been reached.

Count

The number of chargebacks during a period, typically a month.

Ratio

The number of chargebacks in the month of interest divided by the number of transactions during the previous month. For example, 10 chargebacks divided by 1,000 transactions equals a 1% chargeback ratio.

The Math


Count

The sum of all individual chargebacks during the period, typically one month.

Ratio

The count of chargebacks in the month of interest divided by the count of transactions, of the previous month

Average Count

The average of chargebacks of last 1 year.

Average ratio

The average of chargebacks ratios of last 1 year

The Visuals


No Color

The count or ratio is below the threshold by more than 25%

Yellow

The count or ratio is within 75% to 100% of the threshold.

Red

The count or ratio is over 100% of the threshold.

The Updates


This report updates once per day at 8 a.m. Central European Time GMT+2.

The Filters


Default is 30 days like almost all reports

When comparing data ranges it is good to use the same amount of days in the selection and comparison. Comparing date ranges requires both time frames to have the same amount of days.